Wednesday, August 25, 2010

From Tax-Exemption We Go To Illegal Government Domination

For years I have been on to the efforts of anti-YESHA groups to hack away on the issue of tax-exemption.

It started when I joined Dassie Marcus and her fight against the major Jewish charities that refused to transfer funds ear-marked for YESHA in the mid-1980s and even twenty-years later. Even the JNF refused. They claimed the State Department prohibited that and we responded that that was illegal. We eventually won and even Federation funds came across the Green Line

Z STREET, a pro-Israel non-profit corporation, filed a lawsuit in federal court today charging that the IRS violated the organization’s First Amendment rights. The suit was filed after Z STREET was told by an IRS official that its application for tax-exempt status has been delayed because an IRS policy requires consideration of whether a group’s views on Israel differ from those of the current Administration.

“Not only is it patently un-American but it is also a clear violation of the First Amendment for a government agency to penalize an organization because of its political position on Israel or anything else,” said Z STREET president Lori Lowenthal Marcus, a former First Amendment lawyer. “This situation is the same as if the government denied a driver’s license to people because they were Republicans or Democrats. It goes against everything for which our country stands.”

Z STREET filed for tax-exempt status in January of this year and, despite having met all of the requirements for grant of this status, the application has been stalled. An IRS agent told Z STREET’s lawyers that the application was delayed because of a Special Israel Policy that requires greater scrutiny of organizations which have to do with Israel, in part to determine whether they espouse positions on Israel contrary to those of the current Administration.

Z STREET is a Zionist organization that proudly supports Israel’s right to refuse to negotiate with, make concessions to, or appease terrorists. Z STREET’s positions on Israel and, in particular, on the Middle East “peace process” differ significantly from those espoused by the Obama administration.

If Z STREET had tax-exempt status, its donors would be able to deduct contributions from their taxable income. The IRS's refusal to grant tax-exempt status to Z STREET has inhibited the organization‘s fundraising efforts, and therefore impeded its ability to speak and to educate the public regarding the issues that are the focus and purpose of Z STREET.

The lawsuit, Z STREET v. Shulman, Commissioner of Internal Revenue, was filed today in the United States District Court for the Eastern District of Pennsylvania.

Well, let's see if the court system is still independent in the US.

And I want to emphasize that actually this he case is NOT about Yesha, per se. The special scrutiny exists for any and all organizations, Jewish or non-Jewish that has anything to do with Israel, even if they don't make charitable donations across the Green Line. This development is a blanket government act of oppression against people and groups whose policies do not agree with President Obama (and probably J Street, as well).

As a friend informed me:

“US tax laws empower citizens to disagree with their administration. If people liked the way their president was allocating funds, they would just pay their taxes and not take a tax exemption. The result is that the tax exemption clause exists for the specific purpose of encouraging you to funnel your money to other causes not supported by the administration!”

Blogger Paul Caron, a professor of tax law, highlights an interesting lawsuit brought by an organization called Z Street, a pro-Israel group seeking tax-exempt status. (The name is a play on the anti-Israel group J Street, which in turn is a play on K Street, a metaphor for the lobbying business.)

Z Street's complaint alleges that the group was informed its application for tax-exempt status "has been at least delayed, and may be denied" because it opposes the Obama administration's Israel policies. The complaint calls this "the crudest form of viewpoint discrimination" and argues it is "flatly unconstitutional under the First Amendment."

Caron links to an article in the Forward, which describes the defense of the IRS's alleged position:

As the Forward reported in January, some argue that the 1983 U.S. Supreme Court decision in the case of Bob Jones University v. United States could be interpreted to deny nonprofit status to organizations that oppose established American foreign policy. The Bob Jones decision, which found that "an institution seeking tax-exempt status must . . . not be contrary to established public policy," was written to bar tax exempt groups from participating in racial discrimination.

Legal experts were split on the question of longstanding foreign policy, such as America's opposition to Jewish settlements in the West Bank, could fall within the realm of "public policy" as described in Bob Jones. All agreed, however, that the IRS had never used Bob Jones to deny tax-exempt status to nonprofits that oppose American foreign policy.

A crucial distinction is missing here, however. The January Forward article concerned organizations that raise money to support Jewish neighborhoods in the disputed territories, which critics call "settlements." Even if there is a colorable argument that Bob Jones permits the IRS to deny such groups tax-exempt status on the ground that their activities contrary to U.S. public policy, that would not apply to Z Street, which is strictly an educational and advocacy organization.

If Z Street's factual allegations are accurate, then, its constitutional case is solid, and the IRS's activities are scandalous.

1 comment:

back during the election, an Obama allied law firm run by the former IRS commissioner, Mortimer Caplan, who had been doing this for the JFK administration, intimidated the anti-ahmadinejad rally organizers from inviting Sarah Palin

About Me

American born, my wife and I moved to Israel in 1970. We have lived at Shiloh together with our family since 1981. I was in the Betar youth movement in the US and UK. I have worked as a political aide to Members of Knesset and a Minister during 1981-1994, lectured at the Academy for National Studies 1977-1994, was director of Israel's Media Watch 1995-2000 and currently, I work at the Menachem Begin Heritage Center in Jerusalem. I was a guest media columnist on media affairs for The Jerusalem Post, op-ed contributor to various journals and for six years had a weekly media show on Arutz 7 radio. I serve as an unofficial spokesperson for the Jewish Communities in Judea & Samaria.